What Is a Bill of Sale?

Updated August 1, 2023
15 min read
What Is a Bill of Sale?


Imagine that you're in the process of making an important purchase — it could be anything from a used car to a piece of artwork. In the midst of the transaction, you are handed a document — a bill of sale — to sign. Alternatively, you might find yourself on the other side of the equation: You're selling a personal possession, and you're being asked to provide a bill of sale. These circumstances leave you to wonder, what exactly is a bill of sale? What is its legal significance, and is it an absolute necessity in every transaction? 

Knowing about it and when it is legally required can simplify and secure your transactions. That's why we're diving a little deeper into this topic so that you can confidently navigate your purchase or sale.

What Does a Bill of Sale Mean?

The bill of sale meaning is that it's a legal document that records the transfer of personal property from a seller to a buyer. This document acknowledges and proves the sale, protecting both parties from legal repercussions if something goes wrong. Lawrina has a wealth of information on such legal concepts, which can be highly beneficial. You may receive a bill of sale for a car, boat, horse, firearm, furniture, or another item.

The bill of sale is generally short and straightforward, but like any legal document, it must be accurate and complete to satisfy its purpose. It should include the name of both seller and buyer, a description of the item being sold (including serial numbers), the purchase price, any warranties offered by the seller, and a signature line(s). Having well-written documents could expedite the process and prevent potential disputes, and you can find usefully structured templates to guide you in framing effective bills of sale.

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How Does a Bill of Sale Work?

If you make a purchase, you may be handed a bill of sale to sign. Likewise, you may be asked to provide a bill of sale if you are selling a personal item. But what exactly is a bill of sale, and when do you legally need it? 

You can immediately get this Lawrina’s bill of sale template if you need a bill of sale now. All you need is to complete the required information, download a ready-to-go contract, and sign it with another party. It will become your foundation for a safe purchase.

When Do You Need a Bill of Sale?

So, when do you need a bill of sale? A bill of sale is required in most states for any transactions involving an automobile, boat, horse/livestock, firearm, and even furniture. It’s also a great idea to get one when you buy or sell any expensive or sentimental item.

The bottom line is that if you’re buying or selling something significant, it’s best to use a bill of sale form to ensure the transaction is recorded correctly and both parties are legally protected. With this document in place, you can rest assured that your purchase (or sale) will be secure and legitimate. 

However, there are some instances when a bill of sale is unnecessary. For example:

  • When purchasing items with a value of less than $100, you do not need a bill of sale.

  • When selling intangible goods or services (online subscriptions, memberships, etc), a bill of sale is unnecessary.

  • No bill of sale is needed if the item being sold does not require registration or title in your state.

  • In some states, bills of sale are only required for vehicles and real estate – other items may not need one at all!

Why Do I Need a Bill of Sale?

A bill of sale proves that you have sold (or purchased) an item of value. This might prove ownership in the future, something you keep as part of your estate planning or to use for taxes. In this case, what does a bill of sale mean? Should the buyer or seller have a disagreement in the future, this document can also help to protect against any conflict.

For example, if a disagreement goes to court over the quality of a sold car, the warranty included in the bill of sale may help one party prove that they informed the buyer of the condition of the car and did not make any guarantees on its performance. The same goes for any other bills like the Livestock Bill of Sale.

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Components of a Bill of Sale

Generally speaking, each part of a bill of sale document acts like a contract and records the business sale and property transfer in exchange for payment. A legal bill of sale will include:

  1. The date the purchase is made.

  2. The name and address of the person selling the item and of the person who buys the item.

  3. The amount of money paid for the item to be transferred from the buyer to the original owner.

  4. A description of the items being sold.

  5. A guarantee that the item has no other legal claims against it, such as a lien or debt.

  6. A warranty, if applicable.

  7. The signatures of the buyer, the seller, and a notary public who oversees the legal signing of the document.

The Difference between As-is and Warranty

When buying and selling a product, there is often confusion surrounding the terms “as-is” and “warranty.” Understanding the differences between these two critical legal provisions can be essential for both buyers and sellers in determining how to proceed with a bill of sale.

  • As-is: When something is sold “as-is,” the buyer assumes all risk related to the products purchased. This includes any defects, malfunctions, or deficiencies of any kind. The seller will not be responsible for any damages resulting from such issues, no matter how minor they may be. In addition, if the buyer chooses to purchase an item “as-is,” they are typically not covered by any manufacturer’s warranties and must bear the full cost of any repairs or replacements.

  • Warranty: On the other hand, when a product is sold with a warranty, the seller guarantees certain aspects beyond its “as-is” condition. These may include assurance that specific parts are in working order and can be expected to last for a set period of time, as well as protection from defects or malfunctions during normal use. A product sold with a warranty can also provide buyers with some legal remedies if they find themselves dissatisfied with their purchase.

It’s important to note that not all items come with an “as-is” clause and warranty; often, sellers opt for one or the other. Therefore, it is essential to read all fine print and ask questions before making any purchase, as this will help ensure that buyers are fully aware of their rights and responsibilities regarding the item they are purchasing.

In addition to providing legal protection for both parties involved in a transaction, understanding the differences between “as-is” and warranty clauses can also be crucial when it comes to writing up a bill of sale. 

This document should include language related to what type of provision (if any) is included with the purchase so that buyers know exactly what they’re getting into before signing on the dotted line. With this information, both parties can rest assured knowing that their transaction is properly documented and will help to protect against any conflict. 

Key Components of Auto Bill of Sale

Regarding vehicles, a bill of sale should provide even more detail. This includes:

  • Vehicle make and model;

  • Year the vehicle was made;

  • VIN (vehicle identification number);

  • Odometer reading;

  • Vehicle registration information;

  • Names and contact information for buyer and seller;

  • Terms of payment agreement.

A bill of sale for car, truck, or other vehicle should also include a statement about whether the item is being sold “as-is” or with a warranty. If it is being sold with a warranty, then any potential legal remedies for buyers should be clearly stated in the document. Additionally, if the buyer has taken out financing on the purchase of the vehicle, then there should be language in the bill of sale for a car that acknowledges this fact and outlines any conditions related to said financing.

Key Components of Quitclaim bill of sale

A quitclaim bill of sale is a legal document that transfers property ownership from the seller to the buyer. It is often used when only partial or no title documentation exists, such as when transferring property between family members. This type of bill of sale works differently than other types of sales contracts because it does not guarantee any warranties or claims on the part of either party involved.

A quitclaim bill of sale should include detailed descriptions of the property that is being sold, names and contact information for both parties, and whether the seller assumes any liabilities regarding the property’s condition. In addition, it should also state what is included with the sale (e.g., fixtures, personal items) and how much money is being exchanged.

Once the document has been completed, both parties should sign and date it. It is important to note that a quitclaim bill of sale does not transfer title or other legal documents; those must be obtained by the buyer separately. As such, this type of agreement may not always be an appropriate solution when transferring property ownership, so it’s best to speak with an attorney before signing any agreements. With that said, however, a quitclaim bill of sale can provide some protection for both parties involved in the transaction.

How To Get a Bill of Sale?

Getting a bill of sale is relatively simple. First, buyers and sellers should decide what kind of agreement they want to use for their transaction; this could be an “as-is” clause or warranty, depending on the item being sold. They can then contact an attorney or other professional specializing in writing up bills of sale to help them get started.

In most cases, these professionals will provide a template that both parties must fill out for the document to be legally binding. This is generally a straightforward process as long as both parties are honest about the details involved with the sale. Once the bill of sale has been completed, it should be signed and dated by all involved individuals and notarized if necessary.

How Can I Write a Bill of Sale?

Writing a bill of sale is not as complicated as it may sound. It’s important to include all pertinent information, such as names and contact information for both parties, the items being sold, payment details, and any associated warranties or liabilities. It should also be written in plain language so all involved individuals can easily understand.

Buyers and sellers should also use active voice whenever possible when drafting a bill of sale. This will make the document easier to read and help prevent confusion or misunderstanding between the two parties. Finally, if applicable, it’s essential to include specific legal language that outlines what rights are being transferred with the sale (e.g., copyright).

Let’s take a few examples to understand how a bill of sale works.

When buying a car, the bill of sale should include information about the vehicle, such as its make and model, year, VIN number, and odometer reading. It should also list the full names and addresses of both parties involved in the transaction, including any financing details. Additionally, it’s important to note that all parties must sign and date the document for it to be legally binding.

For other types of items being sold or transferred, such as real estate or artwork, the same basic principles apply: The document should include detailed descriptions of what is being sold (e.g., size, color), payment terms (e.g., cash or credit card), names and contact information of all parties involved, and any warranties or liabilities. As always, it should be signed and dated by both parties for the agreement to be valid. 


A bill of sale is a legal document that represents a receipt for a transaction. Some types of sales require a bill of sale, and others do not. If you are entering into a sale but are unsure whether you need one, consider consulting with an attorney.

Article by
Inna Chumachenko

Inna Chumachenko is the Content Lead at Lawrina. She is responsible for managing all the content found on the blog, guides, and other website pages. Inna has a degree in philology and a vast interest in law. In her role at Lawrina, Inna oversees the content team, establishes collaborations with writers, and curates content from various contributors.

If you have any questions or suggestions regarding the content for Lawrina, please feel free to contact Inna directly via email at i.chumachenko@lawrina.org or connect with her on LinkedIn.

Frequently Asked Questions

What is a bill of sale for a car?

A bill of sale for a car is a document that outlines the financial details and other information related to the purchase or sale of a vehicle. It should include details such as the make and model, year, VIN number, odometer reading, names and addresses of all parties involved, and payment terms. Both parties must sign the bill of sale for a car for it to be legally binding.

Who keeps the bill of sale?

Generally, the buyer or seller of an item should keep a copy of their bill of sale for their own records. Additionally, it may be wise to register the bill of sale with state authorities to provide further proof of ownership. Both parties should also make sure that all involved individuals sign and date the document for it to be legally binding.

Is the bill of sale proof of ownership?

Yes, a bill of sale is considered legal proof of ownership in many cases, though it may be wise to register the document with state authorities for added assurance. Both parties must sign and date the bill of sale for items such as cars and real estate to be legally binding and effective proof of ownership.

Can you back out of a bill of sale?

Yes, it is possible to back out of a bill of sale if both parties agree and no money has exchanged hands. If money has already been paid, the buyer may be able to get a refund if they can prove that the item was misrepresented or not as described in the bill of sale. Both parties must read and understand the document thoroughly before signing it so they know their rights.